Office Depot, Inc. (NYSE:ODP), a leading global provider of
office supplies and services, today announced that it has reached a
definitive agreement to sell its 50% stake in Latin American Joint
Venture Office Depot de Mexico S.A. de C.V. to Grupo Gigante,
S.A.B. de C.V. (GIGANTE.MX) for the Mexican Peso amount of 8,777.36
million in cash.
The deal is conditional on receiving Mexican regulatory
approval and Grupo Gigante S.A.B. de C.V. shareholder
approval which Office Depot believes will be secured within 30
days. After the transaction closes, Grupo Gigante, S.A.B. de
C.V. and its affiliates will have 100% ownership of Office Depot de
Mexico.
In accordance with the terms of its planned merger agreement
with OfficeMax, announced on February 20, 2013, Office Depot
obtained the required consent from OfficeMax to proceed with the
sale.
“Grupo Gigante has been a wonderful partner in Mexico for almost
20 years,” said Steve Schmidt, President of International for
Office Depot. “Over the past year, we have been actively exploring
with them ways to illuminate the value of this business through a
potential IPO. Through the process, they expressed a desire to own
the business outright that culminated in the sale announced
today.”
“We believe that this transaction represents a very attractive
value for our shareholders,” said Mike Newman, Executive Vice
President and Chief Financial Officer for Office Depot. “We expect
to use the estimated $550 million in net after-tax proceeds from
the sale to redeem 50% of the Company’s convertible preferred
shares held by BC Partners, Inc. and its affiliates upon receiving
shareholder approval of the planned merger with OfficeMax, as
well as to redeem the $150 million of maturing 6.25% bonds due in
August 2013. Importantly, this transaction will significantly
enhance the liquidity position of the combined Company following
the planned merger.”
Office Depot de Mexico, founded in 1994 as a joint partnership
between Office Depot and Grupo Gigante, has more than 248 stores
throughout Mexico and Central America and over $1.1 billion in
annual sales. Office Depot accounts for its investment in Office
Depot de Mexico using the equity method and the 50% share of Office
Depot de Mexico’s net income is presented in the Company’s
“Miscellaneous income, net” line in the Consolidated Statement of
Operations. The acquired stores will maintain the Office Depot
brand following the closing of the transaction.
Office Depot’s exclusive financial advisor for the transaction
was BofA Merrill Lynch.
Grupo Gigante has a 50-year history of expanding its business
through the acquisition of commercial chains and the creation of
strategic alliances, the incorporation of different formats and
even entering the fields of Central and South America. Aside from
Office Depot stores, the company currently runs The Home Store,
Panda Express, Gigante Grupo Inmobiliario, Restaurantes Toks,
PetCo, Cup Stop and Align Pro in Mexico.
About Office Depot
Office Depot provides office supplies and services through 1,628
worldwide retail stores, a dedicated sales force, top-rated
catalogs, and global e-commerce operations. Office Depot has annual
sales of approximately $10.7 billion, employs about 38,000
associates, and serves customers in 60 countries around the
world.
Office Depot’s common stock is listed on the New York Stock
Exchange under the symbol ODP. Additional press information can be
found at: http://news.officedepot.com.
NO OFFER OR SOLICITATION
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote or approval in any jurisdiction in
connection with the proposed merger of Office Depot, Inc. (“Office
Depot”) with OfficeMax Incorporated (“OfficeMax”) or otherwise, nor
shall there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933, as
amended.
IMPORTANT INFORMATION HAS BEEN AND WILL BE
FILED WITH THE SEC
Office Depot has filed with the SEC a registration statement on
Form S-4 that includes a preliminary Joint Proxy Statement of
Office Depot and OfficeMax that also constitutes a preliminary
prospectus of Office Depot. The registration statement has not yet
become effective. Office Depot and OfficeMax plan to mail the
definitive Joint Proxy Statement/Prospectus to their respective
shareholders in connection with the transaction. INVESTORS AND
SHAREHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS
AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC
CAREFULLY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT OFFICE DEPOT, OFFICEMAX, THE TRANSACTION AND
RELATED MATTERS. Investors and shareholders will be able to obtain
free copies of the definitive Joint Proxy Statement/Prospectus and
other documents filed with the SEC by Office Depot and OfficeMax
through the website maintained by the SEC at www.sec.gov. In
addition, investors and shareholders will be able to obtain free
copies of the definitive Joint Proxy Statement/Prospectus and other
documents filed by Office Depot with the SEC by contacting Office
Depot Investor Relations at 6600 North Military Trail, Boca Raton,
FL 33496 or by calling 561-438-7878, and will be able to obtain
free copies of the definitive Joint Proxy Statement/Prospectus and
other documents filed by OfficeMax by contacting OfficeMax Investor
Relations at 263 Shuman Blvd., Naperville, Illinois 60563 or by
calling 630-864-6800.
PARTICIPANTS IN THE
SOLICITATION
Office Depot and OfficeMax and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the respective shareholders of Office
Depot and OfficeMax in respect of the transaction described the
Joint Proxy Statement/Prospectus. Information regarding the persons
who may, under the rules of the SEC, be deemed participants in the
solicitation of the respective shareholders of Office Depot and
OfficeMax in connection with the proposed transaction, including a
description of their direct or indirect interests, by security
holdings or otherwise, will be set forth in the definitive Joint
Proxy Statement/Prospectus when it is filed with the SEC.
Information regarding Office Depot’s directors and executive
officers is contained in Office Depot’s Annual Report on Form 10-K
for the year ended December 29, 2012 and Amendment No. 1 on Form
10-K/A, which are filed with the SEC. Information regarding
OfficeMax’s directors and executive officers is contained in
OfficeMax’s Annual Report on Form 10-K for the year ended December
29, 2012 and its Proxy Statement on Schedule 14A, dated March 19,
2013, which are filed with the SEC.
OFFICE DEPOT SAFE HARBOR
STATEMENT
This communication may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
concerning Office Depot, Office Depot’s transaction to sell its 50%
stake in Office Depot de Mexico to Groupo Gigante, the merger and
other transactions contemplated by the merger agreement, Office
Depot’s long-term credit rating and its revenues and operating
earnings. These statements or disclosures may discuss goals,
intentions and expectations as to future trends, plans, events,
results of operations or financial condition, or state other
information relating to Office Depot, based on current beliefs of
management as well as assumptions made by, and information
currently available to, management. Forward-looking statements
generally will be accompanied by words such as “anticipate,”
“believe,” “plan,” “could,” “estimate,” “expect,” “forecast,”
“guidance,” “intend,” “may,” “possible,” “potential,” “predict,”
“project” or other similar words, phrases or expressions. These
forward-looking statements are subject to various risks and
uncertainties, many of which are outside of Office Depot’s control.
Therefore, investors and shareholders should not place undue
reliance on such statements. Factors that could cause actual
results to differ materially from those in the forward-looking
statements include adverse regulatory decisions; failure to satisfy
other closing conditions with respect to the merger; the risks that
the new businesses will not be integrated successfully or that
Office Depot will not realize estimated cost savings and synergies;
Office Depot’s ability to maintain its current long-term credit
rating; unanticipated changes in the markets for its business
segments; unanticipated downturns in business relationships with
customers or their purchases from Office Depot; competitive
pressures on Office Depot’s sales and pricing; increases in the
cost of material, energy and other production costs, or unexpected
costs that cannot be recouped in product pricing; the introduction
of competing technologies; unexpected technical or marketing
difficulties; unexpected claims, charges, litigation or dispute
resolutions; new laws and governmental regulations. The foregoing
list of factors is not exhaustive. Investors and shareholders
should carefully consider the foregoing factors and the other risks
and uncertainties that affect Office Depot’s business described in
its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and other documents filed from time to
time with the SEC. Office Depot does not assume any obligation to
update these forward-looking statements.
ODP (NASDAQ:ODP)
Historical Stock Chart
From Sep 2024 to Oct 2024
ODP (NASDAQ:ODP)
Historical Stock Chart
From Oct 2023 to Oct 2024